Liverpool report debt increase of £21.8m and 10-month loss of £40.5m

http://www.guardian.co.uk/football/2013/mar/04/liverpool-accounts-debt-ian-ayre

Liverpool report debt increase of £21.8m and 10-month loss of £40.5m

Liverpool have reported a £21.8m increase in their debt – now £87.2m overall – and a loss of £40.5m in their annual accounts. A restructuring of their accounting period to align it with the football season means that the figures apply to the 10 months between 1 August 2011 to 31 May 2012.

They show that although commercial revenue increased, so did the club's overall liabilities. However, the club's managing director, Ian Ayre, played down the significance of a rise in debt levels. "It's definitely not something I believe anyone should be worried or concerned about. It is seasonal – our debt goes up and down," he told the Liverpool Echo. "We have money to pay out and money coming in, just like any business.

"The difference in football is some of the swings are significant, so if you look at player-trading, we may need to make investments as we do in the summer before our key revenues come in: big sponsorships cheques, big ticket revenues, all the media revenues etc."

"You come to Christmas when you maybe have less revenue coming in but you have got money that needs to go out, both on playing deals that you are doing at the time but also on historic player deals. Debt has increased but I think it's a factor of doing business in the time and place we are.

"We need to continue to improve our squad and what a lot of people won't relate to perhaps is that when you are improving your squad and making that investment, you have knock-on costs that will create debt in the short term. But hopefully in the long term we'll improve our position and we are very aware of that. We will continue to invest in the squad – I think that is what our fans would expect. But the most important thing is that we do it prudently and in a sustainable way that is affordable."

Other contributing factors to the increase in debt were player instalment payments plus exceptional payments of just over £9.5m – relating to matters such as the stadium project, general restructuring and pay-offs to senior employees who left the club.

"We see a big charge within the accounts for amortisation of players that have been disposed of within the period that perhaps came in on a higher cost," added Ayre. "We've made losses as a result of selling them but at the same time we've improved our longer-term position in terms of our wage bill by reducing the wages for those particular contracts. We've in the same period refinanced our lending facilities, which gives us ability for working capital to operate as a business."

Since the end of the accounts reporting period, the owner, Fenway Sports Group, has injected £46.8m into the club via a non-interest-bearing inter-company loan while credit facilities were also refinanced with three major banks, providing £120m of facilities for three years. The loss of £40.5m for the 10-month period was, however, less than the previous year's £49.3m.

Given that was the 2011-2012 accounts, I'd imagine we are in better shape now given

1. Trimming of the wage bill.
2. New credit facilities.
3. No more senior payoffs. (Hopefully)
4. Stadium write off included in the last two accounts.
5. New sponsorship/kit deals.

I'll be interested in 12 months time.

Swings and roundabouts and anyone involved in the world of finance would agree that spotlighting the comings and goings, the ins and outs over one specific period of the financial year can be very misleading - if not mischievous.

Yeah, I don't really know what to think of it either, that's why I didn't really comment on it. But thought it's worth posting here anyway. We'll see in the years to come how this reform really has taken shape.

Nothing to worry about whatsoever.

That report missed out this bit:

"Turnover, if taken over 12 months, would show a reasonably healthy increase.

"The unaudited turnover, which we shared with Deloitte for their publication this year, was £188.7m - an increase on last year's £183.6m. So we are growing - we continue to grow.

"Our commercial revenues continue to grow and I think that is the key message. A lot has happened since the reporting period. Some new players joined the club during the summer and January transfer window which has added depth and strength to the team on the pitch.

"Off the pitch, we forged new partnerships with Warrior, Garuda and Cheverolet - the revenue from these contracts will show in the 2013-14 financial accounts.”

http://www.telegraph.co.uk/sport/football/teams/liverpool/9906989/Liverpool-reveal-increased-debt-as-lack-of-Champions-League-football-leaves-club-playing-catch-up-with-elite.html

Nothing to worry about.

Swings and roundabouts and anyone involved in the world of finance would agree that spotlighting the comings and goings, the ins and outs over one specific period of the financial year can be very misleading - if not mischievous.

Ah Yes Stuey.

Spoken from a Superior Mind    Sir.

Given that was the 2011-2012 accounts, I'd imagine we are in better shape now given

1. Trimming of the wage bill.
2. New credit facilities.
3. No more senior payoffs. (Hopefully)
4. Stadium write off included in the last two accounts.
5. New sponsorship/kit deals.

Also, those 10 months have no European football - not even the much maligned Europa League

Amazed we have found ourselves back towards £100M in debt.

Not surprised that they have written off the value of the squad by £40M either - but amazed that they are still paying out the same in wages.

I can see some of you think there is nothing to worry about, but there's some major discrepancies in that report the way I see it.

(And didn't they tell us last year the figures included writing off money for this big 'stadium project')

Also, those 10 months have no European football - not even the much maligned Europa League

Made little difference overall.  Domestic cup runs that year pretty much made up for the Europa League.   And it'll be vice versa for this year.

With our recent history I am a little concerned but I won't seriously worry until next year

I must admit I was concerned, until I came here for the real story.

"Off the pitch, we forged new partnerships with Warrior, Garuda and Cheverolet - the revenue from these contracts will show in the 2013-14 financial accounts.”

And this is why I come here to check the real facts. Thanks for pointing that our Swabs, I will sleep easier tonight.

(And didn't they tell us last year the figures included writing off money for this big 'stadium project')

It seems this year we repaid a stadium loan of £37.8 million

Given what we've gone through in the last 5 years or so, it's kind of scary how quickly people can say there is "nothing to worry about whatsoever."  Really?  almost 100m in debt and you don't have even the *slightest* concern?  if you don't want to go overboard, and if you think and hope that things are going to turn around soon, okay, but to not even have a tiny ounce of worry seems a bit odd.

 Those accounts are 10 months behind surely they could of given an approximate account of where we stand today.With all the financial whizz kids we employ at the club they should be able to give us figures on a daily basis.No doubt Skip will be able to tell us why the club can or cannot do that.

Amazed we have found ourselves back towards £100M in debt.

Not surprised that they have written off the value of the squad by £40M either - but amazed that they are still paying out the same in wages.

I can see some of you think there is nothing to worry about, but there's some major discrepancies in that report the way I see it.

(And didn't they tell us last year the figures included writing off money for this big 'stadium project')

Made little difference overall.  Domestic cup runs that year pretty much made up for the Europa League.   And it'll be vice versa for this year.

During the period, which covered Liverpool's transfer activity in the August 2011 and January 2012 windows, the club's biggest signings were José Enrique, from Newcastle United, and Sebastián Coates, from Nacional, but the wages still accounted for 70% of the club's total income.

The wage bill, £109m for the 10 months, equating to £131m over a full year, was very close to the £134m Liverpool paid in the previous year, and included the salaries of Andy Carroll, Luis Suárez, Jordan Henderson, Stewart Downing and Charlie Adam, all signed in the early months after FSG's October 2010 takeover.

There's an overlap in the 2 sets of accounts we have seen, leading to some figures being mentioned twice, on a pro rata basis.
This is to bring the clubs accounting period into line with when FSG took over.

That's why I say there is nothing to worry about.
At least not until we see the accounts from the summer after BR took over.
If there isn't a different picture after those accounts, then I will have some concerns.

Given what we've gone through in the last 5 years or so, it's kind of scary how quickly people can say there is "nothing to worry about whatsoever."  Really?  almost 100m in debt and you don't have even the *slightest* concern?  if you don't want to go overboard, and if you think and hope that things are going to turn around soon, okay, but to not even have a tiny ounce of worry seems a bit odd.

If we still had the debt H&G created there would be cause for concern.
If we had the 800m debt the mancs have that also would be cause for concern.

That figure being bandied about is neither here or there in the context of a financiayear.
It is however music to the ears of a wum.

F***ing hell, £100m in debt?!?!

Must admit I'm concerned, but maybe that's because of what has happened in the not so distant past.

Very much concerned about this.
God, please don't take Suarez away from us.

I would like to see what kind of figures we would have all inclusive.

Anyways, IMO these reports don't change much. We know what kind of money we have to spend on players and the wages available.

At least we dont owe the tax man anything. Nice one

That figure being bandied about is neither here or there in the context of a financiayear.
It is however music to the ears of a wum.

You can't be serious.  £100m in debt, given our history, and if, just maybe, you have even an inkling of worry about this, then you're a WUM?!  wow.

Given what we've gone through in the last 5 years or so, it's kind of scary how quickly people can say there is "nothing to worry about whatsoever."  Really?  almost 100m in debt and you don't have even the *slightest* concern?  if you don't want to go overboard, and if you think and hope that things are going to turn around soon, okay, but to not even have a tiny ounce of worry seems a bit odd.

You can always quote me, I don't mind.

Just saying it as I see it - the 2013/14 report should counteract this one. If it doesn't, then I'll ask questions.

Until then, I'm not worried. It's really simple.